SSE shares must bounce when they trade here
The tea leaves show signs of near-term recovery for this high-yielding utility, but there's a problem.
6th June 2019 09:06
by Alistair Strang from Trends and Targets
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The tea leaves show signs of near-term recovery for this high-yielding utility, but there's a problem.
SSE Plc (LSE:SSE)
For some reason, we've had a flurry of emails regarding energy company share prices and we've opted on SSE (LSE:SSE) to run an analysis against.
Something a bit funny appears to be happening across the entire sector. It's showing the chances of some fairly near-term recovery, against a backdrop of the big picture suggesting downward travel.
The immediate suggestion for SSE is of movement above 1,111p indicating the potential of coming travel to 1,182p. At best, this challenges the downtrend since last year and, if above, further oomph toward 1,313p becomes possible. But as always, there's a problem.
Circled on the chart are three price movements, opening second gaps. From left to right, they imply the market said "this price should go down".
Then, the next one says, "yes, you recovered but we really want the price down".
And finally, "Look, stay down. We've told you twice already!"
While we're taking a rather whimsical approach, visually there can be no doubt the market really expects SSE's share price to relax. As a result, the big question is to where?
It looks like weakness now below 1,000p shall drive the share down to 939p next. If broken, secondary calculates at 894p but we really suspect it shall have difficulty closing a day below 939p. The reason for this is fairly simple - it moves the share price into a region with the big picture demanding reversal to 683p ultimately.
To cut to the chase, our belief is, should SSE Plc reach 939p, it may well prove worth a look to catch any bounce coming.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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